Assuming a borrower was looking to secure a $400,000 mortgage at a rate of 3.5% ($1,796) before the presidential election. That same loan at current rates of 4% ( $1,909) presents a payment differential of $113mo. This payment increase could reduce the purchasing power of a buyer of $25,000.
Another concern for consumers is the credibility of their pre-approvals. Pre-approvals are based on going rates at the time the approval was issued. In this current volatile market, the $100 payment increase could result in the borrower not being able to qualify for the program they selected.
For Sellers, rate increases and limited supply could force a reduction in sales price. Especially with an unexpected rise in rates, this can not only cause slippage in home sales but also trigger readjustment by current buyers, who might opt to buy a less expensive home or exit the housing market in hopes of lower rates in the future.